Chancellor Philip Hammond has delivered his first Budget and many voters are relieved to see their favourite financial policies have remained untouched. Those with a penchant for pensions were some of the biggest winners as pension tax relief was left intact, while first-time buyers delighted in the removal of stamp duty for houses worth less than £300,000.
Despite the relative stasis of the country’s financial policies, there were still a couple of announcements that are likely to be of interest to Britain’s accountants as the new financial year approaches. We’ve taken a look at the most significant changes to help you ensure your accounting practices remain up to date.
When it comes to smaller businesses and the self-employed, perhaps the most significant change announced in the Autumn Budget was the increase of the personal income tax allowance from £11,500 to £11,850. The Budget also revealed that the threshold at which the 40 per cent tax rate will apply is also set to rise, jumping from £45,000 to £46,350.
For accountants these changes mean adjusting accounts production processes for personal tax clients, whether you work from a manual system or make use of accounting software such as Capium’s self assessment software. Each of these changes is due to come into effect in April 2018, giving accounting practices just a few months to get systems updated.
Making tax digital
The Budget also revealed that government plans to introduce a new digital tax system, including their desire to have businesses report their taxes to HMRC quarterly, have been pushed back once more.
According to Mr Hammond, businesses will not have to go digital with their tax systems until April 2019, at which point only business above the £85,000 VAT threshold will be affected. Furthermore, the announcement disclosed that smaller businesses will not be forced to implement the digital tax changes until April 2020, allowing accountants working with small and medium sized enterprises (SMEs) a little room to breathe in the near future.
Overall, the Autumn Budget 2017 looks to have produced a fairly positive outcome for accountants. When dealing with SMEs in particular, there are very few changes that need to be implemented at the beginning of the next financial year, so you can simply concentrate on streamlining your day-to-day accounting and bookkeeping practices.